Regrettably we need them.

They are wonderful when you have loads of money and are successful, they are a nightmare when you are struggling with near negative equity.

You may have a wonderful commercial manager for two years and then he moves on and new one comes in who decides to crucify you as part of his or her career move. This is why you need at least two accounts, if you try and set up another account when you are struggling, it can be very difficult and costly.

They will tempt you with one year’s free banking, or even two years, some if they are providing the mortgage will only give you six months. This lulls you into a false sense of security and a disregard for bank charges when they finally come into play.

Once bank charges come into play, they charge you for every transaction, if you deposit cash there is a counting charge, cheques can cost 40-55p each. If you want change it may well cost you 2 or 3 percent. In some cases if you get under £100.00 worth of change it will cost you nothing; over £100.00 they charge you. The smart thing to do just before your free banking expires is set up a Giro account in the local sub post office and pay all your bankings in there and make an arrangement for change. You may not be able to use a company or business name in the post office, so it will have to be an individual name. Ensure that you clarify this with your accountant so that it is on record, that you are not just taking all the money out of the business. Then transfer the money with one cheque once a week or once a fortnight as you need to, to your original bank, this means that the money level stays the same but the transactions which they charge you for are minimal, cutting down your bank charges.

As a rough guide every £100.00 that you save is a £1000.00 through the till.

I had a very busy pub and my bank charges were outrageous since I was always heavily in credit and had no time to spend it. I switched my paying in banking to a building society, since they made no charge for depositing cheques and money and they were more convenient time wise for banking and accessible. In addition I was getting a good rate of interest on the money. I was too busy to check the charges and some considerable time later I realised my bank charges were still outrageous. I spoke to the bank and they said it was the level of business that I was doing. Shortly afterwards the Manager phoned saying that they had made a mistake and were refunding £1500.00. I said it should be a more precise figure. He said it was an ex-gratia settlement. He left shortly afterwards and a new manger came in who was a complete and utter pain and didn’t want to know. However when he was away and I spoke to his area manager saying that I was not happy about the £1500.00. He asked me to put it in writing to the General Manager which I did and after various correspondence they offered me just over £13,500.00 as an ex-gratia Settlement. I pointed out that it was equivalent to £135,000 through the till and how did I know it was correct. They then offered me an interest free overdraft for the next three years on my personal account, so I agreed. I took the money, closed the business account and kept the personal account. I still have that particular personal account, but they will now never give me more than £200.00 overdraft facility. They have long memories. If however you have a good manager stick with him especially if he understands your business.

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